Japanese Contractor Bribes City Thai Officials

[george]

Japanese contractor allegedly bribes city Thai officials

A former executive of Nishimatsu Construction Co. has told Japanese prosecutors that the Japanese general contractor paid more than 400 million yen or Bt125 million in 2003 to officials of Bangkok Metropolitan Administration (BMA), Kyodo News Agency reported Monday.

The alleged bribes were in return for ''favors'' connected to the award of a tunnel project in 2003. Incumbent Prime Minister Samak Sundaravej was Bangkok governor at that time.

The former executive of the major Japanese general contractor is being investigated by the Tokyo District Public Prosecutors Office on suspicion of violating the Foreign Exchange and Foreign Trade Law for bringing in around 100 million yen from overseas without reporting it to customs, the sources said.

In September 2003, a partnership Nishimatsu Construction and a local general contractor was awarded a project ordered by the BMA to build a tunnel to ease flooding.

The project was worth around 6 billion yen, according to the administration.

Local staff of Nishimatsu in Thailand prepared bribes after consulting executives of Nishimatsu's Thai partner, the sources said. The payments were apparently made to Thai government officials and officials in charge of overseeing bids for the project just before and after the project was awarded.

The Nishimatsu executive claims he was not directly involved in bribing the officials but ''in return for favors to secure the tunnel construction project, the company paid a total of more than 400 million yen to Thai government officials,'' the sources said.

''Such operational funds were necessary in order to be awarded public works projects in Thailand,'' he was quoted as saying.

The prosecutors searched Nishimatsu's head office in Tokyo's Minato Ward in early June in connection with the former executive's suspected violation of the foreign exchange law. The prosecutors suspect that the 100 million yen he brought into Japan was part of a slush fund.

The prosecutors are also conducting investigations into Pacific Consultants International, a major Japanese construction consultancy, in connection with a case of suspected bribery in Vietnam related to a project funded by official development assistance from the Japanese government.

-- The Nation 2008-07-07

[Chang_paarp]

The Nishimatsu executive claims he was not directly involved in bribing the officials but ''in return for favors to secure the tunnel construction project, the company paid a total of more than 400 million yen to Thai government officials,'' the sources said.

''Such operational funds were necessary in order to be awarded public works projects in Thailand,'' he was quoted as saying.

:D

I wonder what the plausible deniability defense will be?

[Bizz]

same old same old thai politics are laughable at the best of times.

[h90]

corruption under Samak?

I can't believe it! He always seemed to be so honest :D

[singa-traz]

The Nishimatsu executive claims he was not directly involved in bribing the officials but ''in return for favors to secure the tunnel construction project, the company paid a total of more than 400 million yen to Thai government officials,'' the sources said.

''Such operational funds were necessary in order to be awarded public works projects in Thailand,'' he was quoted as saying.

:D

I wonder what the plausible deniability defense will be?

"Corruption, what corruption ... show me the receipt!"

Can anyone remember who said that?

[Nordlys]

The prosecutors are also conducting investigations into Pacific Consultants International, a major Japanese construction consultancy, in connection with a case of suspected bribery in Vietnam related to a project funded by official development assistance from the Japanese government.

-- The Nation 2008-07-07

Let's not forget this is the company that was responsible for project management consultancy for Suvarnabhumi airport project.

http://www.pci-world.com/en/service/airport.html

Edited July 7, 2008 by Nordlys

[h90]

The Nishimatsu executive claims he was not directly involved in bribing the officials but ''in return for favors to secure the tunnel construction project, the company paid a total of more than 400 million yen to Thai government officials,'' the sources said.

''Such operational funds were necessary in order to be awarded public works projects in Thailand,'' he was quoted as saying.

:D

I wonder what the plausible deniability defense will be?

"Corruption, what corruption ... show me the receipt!"

Can anyone remember who said that?

I remember the sentence, but not who said it....One of the usual ones I guess but can't remember.

[Tony Clifton]

Oh Samak Samak Samak...

[Tony Clifton]

Oh Samak Samak Samak... Wasn`t retirement easier? What really drew you back ito the sh!"t pile?

[Gravelrash]

No doubt this will be pursued with an apathetic cavalcade of indifference by anti-corruption officers. No stone will be left unturned in deciding there is no evidence or case to answer.

[h90]

Oh Samak Samak Samak... Wasn`t retirement easier? What really drew you back ito the sh!"t pile?

[Flatouthruthefog]

No doubt this will be pursued with an apathetic cavalcade of indifference by anti-corruption officers. No stone will be left unturned in deciding there is no evidence or case to answer.

When of course the edict SHOULD read:

"No turd will be left unstoned!"

[Scott]

Well of course there will be no evidence--they've already spent it all.

I once had a friend who got stopped for drugs, but he managed to get off because he had taken them all!!

[h90]

Well of course there will be no evidence--they've already spent it all.

I once had a friend who got stopped for drugs, but he managed to get off because he had taken them all!!

No evidence...there will be people earning 20.000 per month, having 2 new BMW 1 Mercedes and just making a real estate.

But thats normal, they 30.000 they saved from their salary.

[Scott]

No, no, no. All that money is legal it came from the 3 rai of land that grandpa left to aunt Noi, who gave it to me and I sold it for 10,000,000 baht when they decided to build something there! Etc. etc. etc. Oh, and the BMW actually belongs to the wife, who got it from the land her mother sold for XXXXX, etc. etc.

So, you see it's all legal!!!

[sniffdog]

Is this news? This is just a tip of the iceberg ...

[geriatrickid]

Coincidence that the announcement occurs as the G8 is going on in Japan, where corruption is on the agenda?

Instead of wagging a finger at the Thais, how about taking a hard look at the implicated Japanese and the Japanese government which has one of the worst records in respect to dealing with the issue. "G8 Leaders committed to ratify and implement the United Nations Convention Against Corruption. Over 100 countries have ratified the agreement, increasing its potential to provide an effective global framework for combating corruption. Yet, Germany, Italy and Japan have still not taken action." source Transparency International.

More importantly there is an agreement in effect for the OECD in respect to international controls on corruption. Japan has one of the worst records.

Yes iit is wrong to take a bribe on international projects, but it is equally as wrong to offer a bribe or to pay one. I would be very surprised if the japanese government takes any significant action against the Japanese nationals implicated, despite there being agreements to do so. The case here is customs declarations, not an enforcement of anti corruption obligations under the agreements.

[Nordlys]

Yes iit is wrong to take a bribe on international projects, but it is equally as wrong to offer a bribe or to pay one.

I would be very surprised if the japanese government takes any significant action against the Japanese nationals implicated, despite there being agreements to do so. The case here is customs declarations, not an enforcement of anti corruption obligations under the agreements.

Bribing a foreign civil servant is punishable by up to five years in prison and/or up to 5 milion yen fine under Japanese anti trust law. And that's what he's likely to get if Thai authority can bring to justice those implicated in this bribery scandal.

[grantbkk]

When I read this big news today all I could do is LOL. This would be big news if there was NOT a bribe in a mega project involving Thailand. The real story is the back story. What is the real motivation of the tattletale? All I know for sure is that it must be a very slow news day to put another bribe story on the front page. It kind of reminds me of all the Philippine newspapers with bribes, corruption and murder everyday all the time. NO ONE can be surprised by this. Poisitive Spin on Corruption must be a required subject for all first year university students.

[Seneque]

Soon as a headline :

Thai officials were delivered sushis in a lunch box by a japanese contractor ! ...

[Scott]

This is newsworthy because it was a foreigner--another evil foreigner--leading the good folks here astray!

[Chang_paarp]

This is newsworthy because it was a foreigner--another evil foreigner--leading the good folks here astray!

It is newsworthy in some circles because, yet again, prosecution of foreigners by their home authorities for bribes in Thailand.

Still waiting for the TAT/ BKK film festival investigation (FBI files available from internet), the Swapypoon baggage scanners (GE has already pleaded guilty and paid fine in USA) and ......

[Old Man River]

This is newsworthy because it was a foreigner--another evil foreigner--leading the good folks here astray!

It is newsworthy in some circles because, yet again, prosecution of foreigners by their home authorities for bribes in Thailand.

Still waiting for the TAT/ BKK film festival investigation (FBI files available from internet), the Swapypoon baggage scanners (GE has already pleaded guilty and paid fine in USA) and ......

Below is part of public information available on the internet as it relates to a US SEC's filing on GE InVision. It by no way provides any proof of what actually occurred, only suspicions.

"From at least January 2003 through April 2004, in communications with the responsible Regional Sales Manager and the Senior Executive, the distributor indicated that it had offered to make gifts or payments to officials with influence over the airport corporation. Based on the information provided to the Regional Sales Manager and the Senior Executive, InVision was aware of a high probability that the distributor intended to fund any such gifts or offers out of the difference between the price the distributor paid InVision to acquire the machines and the price for which the distributor was able to resell them."

[sibeymai]

Bribing a foreign civil servant is punishable by up to five years in prison and/or up to 5 milion yen fine under Japanese anti trust law. And that's what he's likely to get if Thai authority can bring to justice those implicated in this bribery scandal.

No chance he'll be going to jail then, is there ?

[Old Man River]

Yes iit is wrong to take a bribe on international projects, but it is equally as wrong to offer a bribe or to pay one.

I would be very surprised if the japanese government takes any significant action against the Japanese nationals implicated, despite there being agreements to do so. The case here is customs declarations, not an enforcement of anti corruption obligations under the agreements.

Bribing a foreign civil servant is punishable by up to five years in prison and/or up to 5 milion yen fine under Japanese anti trust law. And that's what he's likely to get if Thai authority can bring to justice those implicated in this bribery scandal.

Is it up to the Thai authorities to prove prior to the Japanese authorities being able to proceed on this? If it is a Japanese law then I would think the Japanese courts could do their own research and come up with their own conclusions.

[A_Traveller]

Following on from the Invision matter the SEC site LINK includes the following:-

C. Thailand

11. Beginning no later than 2002, InVision competed for the right to supply explosives detection machines to an airport under construction in Bangkok, Thailand. Construction of the airport is overseen by a corporation controlled by the government of Thailand. InVision retained a distributor in Thailand to lobby the airport corporation and the Thai government on InVision's behalf. Under the terms of the transaction, the distributor would purchase the explosives detection machines from InVision and then make its profit by reselling them at a higher price for use by the airport. The distributor was InVision's primary representative to the airport and associated governmental agencies.

12. From at least January 2003 through April 2004, in communications with the responsible Regional Sales Manager and the Senior Executive, the distributor indicated that it had offered to make gifts or payments to officials with influence over the airport corporation. Based on the information provided to the Regional Sales Manager and the Senior Executive, InVision was aware of a high probability that the distributor intended to fund any such gifts or offers out of the difference between the price the distributor paid InVision to acquire the machines and the price for which the distributor was able to resell them. Despite this awareness, InVision authorized the distributor to continue to pursue the transaction.

13. In or about April 2004, the airport corporation, through its general contractor, agreed to purchase 26 of InVision's explosive detection machines from the InVision distributor in a sale InVision valued at approximately $35.8 million. Consummation of the transaction was deferred after InVision received notification of possible FCPA violations. InVision has not recognized any revenue from the transaction and has agreed that the transaction will proceed, if at all, only as a sale directly to the airport corporation or another Thai governmental entity.

On the basis of this and activities in China and the Philippines the company then in GE's hands was subject to the following SEC penalty

In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent's [edit for clarity this effectively means GE] Offer.

Accordingly, it is hereby ORDERED that:

A. Respondent cease and desist from committing or causing any violations and any future violations of Sections 13((2)(A), 13((2)(, and 30A of the Exchange Act.

B. Respondent shall comply with the undertakings enumerated in Section III, above.

C. IT IS FURTHER ORDERED that Respondent shall, within ten days of the entry of this Order, pay disgorgement of $589,000 plus prejudgment interest of $28,703.57, for a total amount of $617,703.57 to the United States Treasury.

Now as we all know there was rush to seek out the recipients and bribers within the distributors........... as opposed to claiming, as Thaksin did that there was no evidence of any such activity. One other thing, was the transaction ultimately completed directly with

... the airport corporation or another Thai governmental entity.

Regards

Edited July 8, 2008 by A_Traveller

[frodo]

"I am innocent. I have nothing to do with this."

[Payboy]

said tunnel was absoultely necessary to allow fire trucks rush to the scene asap.....

Edited July 8, 2008 by Payboy

[Old Man River]

Following on from the Invision matter the SEC site LINK includes the following:-

C. Thailand

11. Beginning no later than 2002, InVision competed for the right to supply explosives detection machines to an airport under construction in Bangkok, Thailand. Construction of the airport is overseen by a corporation controlled by the government of Thailand. InVision retained a distributor in Thailand to lobby the airport corporation and the Thai government on InVision's behalf. Under the terms of the transaction, the distributor would purchase the explosives detection machines from InVision and then make its profit by reselling them at a higher price for use by the airport. The distributor was InVision's primary representative to the airport and associated governmental agencies.

12. From at least January 2003 through April 2004, in communications with the responsible Regional Sales Manager and the Senior Executive, the distributor indicated that it had offered to make gifts or payments to officials with influence over the airport corporation. Based on the information provided to the Regional Sales Manager and the Senior Executive, InVision was aware of a high probability that the distributor intended to fund any such gifts or offers out of the difference between the price the distributor paid InVision to acquire the machines and the price for which the distributor was able to resell them. Despite this awareness, InVision authorized the distributor to continue to pursue the transaction.

13. In or about April 2004, the airport corporation, through its general contractor, agreed to purchase 26 of InVision's explosive detection machines from the InVision distributor in a sale InVision valued at approximately $35.8 million. Consummation of the transaction was deferred after InVision received notification of possible FCPA violations. InVision has not recognized any revenue from the transaction and has agreed that the transaction will proceed, if at all, only as a sale directly to the airport corporation or another Thai governmental entity.

On the basis of this and activities in China and the Philippines the company then in GE's hands was subject to the following SEC penalty

In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent's [edit for clarity this effectively means GE] Offer.

Accordingly, it is hereby ORDERED that:

A. Respondent cease and desist from committing or causing any violations and any future violations of Sections 13((2)(A), 13((2)(, and 30A of the Exchange Act.

B. Respondent shall comply with the undertakings enumerated in Section III, above.

C. IT IS FURTHER ORDERED that Respondent shall, within ten days of the entry of this Order, pay disgorgement of $589,000 plus prejudgment interest of $28,703.57, for a total amount of $617,703.57 to the United States Treasury.

Now as we all know there was rush to seek out the recipients and bribers within the distributors........... as opposed to claiming, as Thaksin did that there was no evidence of any such activity. One other thing, was the transaction ultimately completed directly with

... the airport corporation or another Thai governmental entity.

Regards

This is the link I posted in another thread, but one thing about this filing as it relates to the CTX Scanner case for Thailand is that it is a cease and desist. It ultimately called for GE InVision to deal directly with the Thai government instead of selling to the distributor, which allegedly planned to sell the scanners to the Thai government at a higher price (which would have generated funds to bribe these same officials). Hence, this never took place.

The above being the case, then there was only the intent to bribe, but no actual bribery taking place. Since no harm no foul, there seems to be no case to prosecute as it relates to the CTX Scanners.

[stumonster]

The above being the case, then there was only the intent to bribe, but no actual bribery taking place. Since no harm no foul, there seems to be no case to prosecute as it relates to the CTX Scanners.

maybe I am being overly cynical but did they have to use a specified contractor to do the installation ? there still would have been opportunities to take extra cash somewhere in the process.